October 22, 2020
SEC Adopts Final Rule and Related Amendments for Fund-of-Funds Arrangements
The SEC recently adopted a new rule, Rule 12d1-4 (FoF Rule), and related amendments designed to implement a regulatory framework for investments by registered investment companies and business development companies (BDCs) (collectively, funds) in underlying funds. The release adopting the amendments (Adopting Release) also rescinds Rule 12d1-2 (which applies to…
October 9, 2020
SEC Reaches Settlement with Investment Adviser Regarding Recapture of Waived Fees and Reimbursed Expenses from Money Market Funds
The SEC reached a settlement with a registered investment adviser (Adviser) for making material misrepresentations regarding the expenses paid by four money market funds (Funds) that the Adviser managed, in connection with fund reimbursement of fees and expenses that the Adviser had waived or reimbursed during the period from January…
October 5, 2020
SEC Settles Charges Against Investment Adviser for Unlawful Cross Trades
The SEC recently settled charges against a registered investment adviser that engaged in hundreds of impermissible cross trades, including principal transactions, between its client accounts. The SEC Order found that the investment adviser violated Sections 17(a)(1) and 17(a)(2) of the 1940 Act, and Rule 38a-1 thereunder, and Sections 206(3) and…
September 23, 2020
NYSE Arca, Inc. Files Proposed Rule Change to Adopt a Generic Listing Rule for Certain Semi-Transparent ETFs
On September 15, 2020, the SEC issued a notice (Notice) regarding the NYSE Arca, Inc.’s (Exchange) filing of a proposed generic listing rule for certain semi-transparent ETFs (ST ETFs). An ST ETF is an exchange-traded fund that discloses alternative forms of information about its underlying portfolio each day, such as…
August 7, 2020
SEC Proposes Modernizations to Fund Shareholder Reports and Disclosures
On August 5, 2020, the SEC proposed rule and form amendments to modernize the disclosure framework for open-end funds (including mutual funds and ETFs) with respect to shareholder reports and ongoing prospectus updates (Amendments). The Amendments would streamline shareholder reports for open-end funds to require these reports to highlight and…
August 7, 2020
Director of SEC’s Division of Investment Management Discusses Easing Restrictions on Certain Registered Fund Investments in Private Funds
At a recent speech at PLI’s Investment Management Institute, Dalia Blass, Director of the SEC’s Division of Investment Management (Division), announced that the Division’s staff (Staff) was re-examining a Staff position that historically limited certain registered fund’s investments in underlying hedge funds and private equity funds (private funds). The Staff’s…
July 8, 2020
Registered Fund Adviser and Affiliate Censured and Fined for Violations of Section 12(d)(1)(A) (Fund of Funds Limitations) and Compliance Rules
On July 2, 2020, the SEC entered into a settlement order with an adviser and its foreign affiliate (Order) involving violations of the fund-of-funds ownership restrictions in Section 12(d)(1)(A) of the 1940 Act and the compliance rules contained in Rule 38a-1 under the 1940 Act and Rule 206(4)-7 under the Advisers…
June 26, 2020
Department of Labor Proposes Rule Affecting ESG Plan Investments
On June 23, 2020, the U.S. Department of Labor (DOL) proposed a rule intended to clarify ERISA plan fiduciaries’ responsibilities with respect to environmental, social and governance (ESG) investing. The proposal is designed in part to make clear that ERISA plan fiduciaries may not invest in ESG vehicles when they…
June 23, 2020
SEC Extends In-Person Meeting Relief for Fund Boards
On June 19, 2020, the SEC issued an exemptive order that superseded a prior order issued on March 25, 2020 (Prior Order) that provided funds and business development companies (BDCs) relief from the in-person board meeting requirements of the 1940 Act and certain rules thereunder as a result of the…
June 16, 2020
Federal Reserve Announces Updates to Secondary Market Corporate Credit Facility
Federal Reserve Announces Updates to Secondary Market Corporate Credit Facility On June 15, 2020, the Federal Reserve (Fed) announced updates and released an updated term sheet relating to the Secondary Market Corporate Credit Facility (SMCCF). The Federal Reserve Bank of New York will begin buying eligible corporate bonds issued…